Iran rolls out huge untapped riches

Iran seeks to chisel out a name among the world’s major miners, courting international prospectors into a sector which boasts some of the world’s most stupendous riches but remains vastly underdeveloped.

Iran is estimated to hold around 60 billion metric tons of mineral reserves.

Last week, the country hosted a handful of foreign managers in the sector, including from global miner Rio Tinto, in its biggest mining event yet to roll out reserves for development.

Managing director of Germany’s Entracon AG Werner Schoeltzke, one of the participants, highlighted Iran’s massive energy and transportation capacities and its exceptional geographical position which it could use to expand mining.

“Iran has high capacities for investment and development of aluminum industry. Its enormous gas reserves, access to high seas and its more than four decades of experience in the sector offer a favorable ground for expansion,” IRNA quoted him as saying.

Iran, which built the Middle East’s first aluminum plant in the 1950s, is currently producing some 400,000 metric tons per year, with plans to raise it to 1 million tons.

The country’s biggest producer, Iranian Aluminum Company (IRALCO), is listed on the Tehran Stock Exchange.

Schoeltzke said this target is easily achievable thorough the participation of the private sector and foreign investment.

US-led sanctions are preventing foreign companies from venturing into major enterprises in Iran but anticipation is building for a breakthrough in the ongoing nuclear negotiations to remove the hurdle.

Chief executive of Finland engineering group Outotec Pertti Korhonen said he was upbeat about the removal of sanctions and looking for new tie-ups with Iranian miners.

The Swiss company is buoyed by a recent order by an Iranian company for design and delivery of technology and services for an iron ore pelletizing plant in Yazd.

Iran is estimated to hold around 60 billion metric tons of mineral reserves, making it the 15th richest country in this category. Up to 68 types of minerals have been discovered across the country.

Iran's Sarcheshme copper mine

Iran’s zinc reserves are the world’s largest, with copper, iron, uranium and lead ranked between seventh and 12th. However, mining and mineral industries combined account for less than five percent of the country’s GDP.

Craig Moulton, business advisor to Australia’s Rio Tinto Copper Projects, said state support, including resource and risk provisions, is crucial to the mining sector.

He said it is important to show investors that regulations are stable and there’s an equitable taxation system, enough investment security and a supply of transparent geological data.

Florian Brickenstein, president of Switzerland’s Bryanston Resources AG, touched on some of the challenges which Iranian producers face for the sale of iron ore.

He said Iranian steelmakers have to review their pricing strategies given the recent slump in the global market and high yield of Iran’s iron ore.

In Iran, however, Western sanctions have left Asian companies with a established jurisdiction.

Xuejian Li, chief technology officer of MCC-CERI, said since 2013 his companies have resumed six steel production projects in Iran which had been suspended due to financial problems.